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Over $365 Million in Improper Payments Identified By RACs Since October 2009

CMS recently reported that RACs have identified $312.2 million in overpayments from October 2009 through March 2011. During the same period, $52.6 million in underpayments were identified. While these figures are well below the over $1 billion in improper payments identified during the demonstration program, they are expected to increase. RACs are currently reviewing large numbers of DRGs in coding and medical necessity reviews and it is anticipated that these will result in identification of more improperly billed claims. The first quarter of 2011 accounted for $184.6 million in identified improper payments and these trends can be expected to continue for the foreseeable future.

CMS also released the top approved issue for each RAC region. The top issue for RAC Region A is Ventilator Support of 96+ hours; the top issue for RAC Region B is Extensive Operating Room Procedure Unrelated to Principal Diagnosis; the top issue for RAC Region C is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay; and the top issue for RAC Region D is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay.

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On May 16, the Office of the Inspector General for the Department of Health and Human Services released the report from its audit of physician therapy services provided during home health episodes. The report outlines the OIG’s findings that the Centers for Medicare and Medicaid Services (CMS) made duplicate payments for the same home health services. Specifically, the payments for the same services were made to the physician under Medicare Part B and then to the home health agency under the Medicare home health prospective payment system (HH PPS). The OIG recommended that CMS eliminate duplicate payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement. CMS has agreed with the OIG’s recommendations and has indicated that it will take action to address the recommendation.

For more information on proper billing practices for home health services, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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As of April 20, 2011, a statement, writing, or action by a health care professional to an individual, or an individual’s family, that expresses sympathetic feelings towards that individual’s pain or death cannot be used against the professional in an action for medical malpractice. However, this bill does not apply to additional statements of fault or other culpable conduct. Click here to view the full version of the Act. If you have any questions or concerns about the legal effects of your actions, please contact a Wachler attorney at 248-544-0888.

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DCS Healthcare: The Region A RAC added three new medical necessity claims to its approved issues list. These claims are:

  • Peripheral/cranial nerve and other nervous system procedures with MCC (MS-DRG 040);
  • ECMO or tracheostomy with MV 96+ hrs or PDX except face, mouth and neck with major O.R. (MS-DRG 003);
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The Centers for Medicare and Medicaid issued a new rule that will make it easier for hospitals to use telemedicine when treating patients. The final rule, which takes effect sixty days following its publication, removes unnecessary burdens for hospitals and critical access hospitals (CAHs) to use telemedicine to serve patients in a timelier manner. These benefits will also reach rural hospitals and CAHs with limited access to primary care physicians and specialists.

Currently, any hospital or CAH that receives telemedicine services must undertake an extensive credentialing and privileging process for each physician or practitioner who will provide the telemedicine services to the patients. CMS concluded that its current requirements were often duplicative and unnecessarily burdensome, particularly for small hospitals and CAHs. It recognized that small hospitals and CAHs do not have access to a medical staff with the requisite clinical expertise to evaluate and privilege the various specialty physicians that could provide the hospital with telemedicine services. However, through the final rule, CMS will now permit hospitals and CAHs to implement a streamlined credentialing and privileging process for these telemedicine providers. Specifically, a hospital or CAH that provides telemedicine services to patients through an agreement with another hospital or telemedicine entity may rely on the information from that other entity when making credentialing and privileging decisions about the providers at the other site who will supply the medical services through telemedicine.

For any questions regarding compliance issues related to telemedicine services, please contact a Wachler & Associates attorney at 248-544-0888.

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Over $30 billion has been set aside by the government to use for incentive payments in an effort to get health care professionals to switch to electronic records. One reason for the push towards electronic records is the ability exchange patient information between systems. As a way to efficiently capture this benefit, government-funded regional health information organizations (RHIOs) were established. These organizations sign up doctors and hospitals in a specific area and coordinate the transfer of electronic patient records between health care providers. However, a recent survey published in Annals of Internal Medicine shows that RHIOs’ future looks to be uncertain as their financial viability appears to be a cause for concern.

The study surveyed 197 RHIOs, of which 165 returned the surveys. It was shown that only 75 of the RHIOs were currently operational, covering a mere 14% of hospitals and 3% of ambulatory practices in the United States. Moreover, only 13 of those RHIOs are able to conduct the necessary exchange of information that enable doctors to partake in receiving payments of the $30 billion that the government set aside in an effort to promote the electronic switch. Finally, only 67% of the currently operational RHIOs were found to be financially viable. The results of this study creates a concern of whether RHIOs can indeed be effective in assisting hospitals and physicians with the type of electronic information sharing that was intended to advance the quality of care for patients.

If you need help understanding the meaningful use requirements or assistance with negotiating EHR contracts, please contact a Wachler and Associates attorney at 248-544-0888.

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The ONC announced last Wednesday that the Medicare electronic health record (EHR) incentive payments will begin disbursement this week. The payments will be made to providers who have met all of the program conditions, including the meaningful use requirements.

Eligible participants can expect to receive a payment based on 75% of their total Medicare allowed charges. These allowed charges must be submitted no later than two months after the end of 2011. The maximum allowed charges used for the 2011 program are $24,000, meaning that the incentive payment will not exceed $18,000. However, the eligible participant must meet the $24,000 in total Medicare charges before any payments will be made to that participant. Finally, payments can be expected to be paid in the same manner as that participant receives other Medicare services (electronic funds or paper check).

If you need help understanding the meaningful use requirements or assistance with negotiating EHR contracts, please contact a Wachler and Associates attorney at 248-544-0888.

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The Office of the Inspector General (OIG) issued an unfavorable advisory opinion with respect to a joint venture between a pharmacy and long term care facilities.

The proposed arrangement would include a long term care pharmacy incorporated in the requestor’s market area. The owners of the long term care pharmacy would include an employee of the requestor and one or more long term care facility owners. The requestor provides services to long term care facilities and the employee is a pharmacist for the requestor and also serves as a consultant to long term care facilities.

Under the proposed arrangement, the long term care facilities and the employee would receive shares in this new company based on capital contributions and services provided. The newly incorporated pharmacy would enter into a contract with the requestor where it would pay the requestor a management fee for providing office space, day to day management of operations, inventory storage and billing services. The new corporation would not have any employees. Some of the products and services delivered to customers by the new corporation would be covered and reimbursed by federal healthcare programs.

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The percentage of physicians in the United States using electronic health records (EHR) has increased by nine percent (20% to 29%) over the past twelve months. The push towards electronic records has been firmly supported by the current and previous presidential administrations. The Obama Administration aims to have at least 50 percent of Americans using EHRs by 2014 in an attempt to reduce health care costs and medical errors.

This month, the United States government will begin distributing incentive payments to hospitals and doctors who opt to use EHRs. These incentive plans could pay out as much as $31.3 billion. If health care providers meet government standards for the EHRs, they may be eligible to receive up to $44,000 over six years through Medicare and up to an additional $63,750 over five years from Medicaid. Additionally, the federal government plans to reduce Medicare reimbursements to health care providers who fail to make the electronic switch by 2015.

If you need help understanding the meaningful use requirements, HIPAA security or assistance with negotiation of EHR contracts, please contact a Wachler and Associates attorney at 248-544-0888.

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On May 4, 2011, the Seventh Circuit Court was faced with the issue of whether a doctor’s actions violated the anti-kickback statute (United States of America v. Borrasi). Dr. Roland Borrasi was convicted of Medicare fraud after he accepted payments in the form of a salary from a psychiatric hospital in exchange for referring patients to the facility. Over a time period of three years, Borrasi and four other physicians were paid a sum of $647,204 for referring hundreds of patients to the hospital.

In an effort to conceal these bribes, the physicians were placed on the hospital’s payroll, given false titles and job descriptions, and asked to submit false time sheets. Through testimonial evidence, the court found that the physicians were not expected to perform any duties listed in their job description. Moreover, the bribed physicians attended very few meetings, were rarely seen at the facility, and were not expected to perform any of their administrative duties. The facts of the case led the jury to find Borrasi guilty of Medicare-related bribery in violation of 42 U.S.C. § 1320a-7(b)(1).

On appeal, the Seventh Circuit denied Borrasi’s argument for interpreting the statute. Borrasi argued the court to adopt a “primary motivation” rule, where a defendant shall be found not guilty if the primary motivation behind the payments was to compensate for bona fide services provided. Instead, the court held that if part of the payment compensated past referrals or induced future referrals, that portion of the payment violates the statute. Therefore, so long as some amount of the payments made to Borrasi and the other physicians were made not pursuant to a bona fide employment relationship, then the statute has been violated.

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